In the race for Arctic fuel, ecological dangers winked at

When writer Anton Chekhov arrived on the Russian island of Sakhalin in 1890, he was overwhelmed by the harsh conditions at the Tsarist penal colony. It wasn’t just the floggings, forced prostitution and ill-treatment of children in the colony. It was the environment itself. “There is no climate on Sakhalin, just nasty weather,” Chekhov wrote. “And this Island is the foulest place in all of Russia.”

More than a century on, Sakhalin’s prisoners have been replaced by oil and gas workers, most of whom seem to agree that Chekhov’s description still fits.
The sparsely populated island — which is the length of Britain — has some of the most extreme weather on earth. Marine cyclones and violent snowstorms rip through its forested hills, and the ocean waters off its northern coast freeze solid for a good part of the year. In winter, temperatures drop to minus 40 Celsius and snow can pile three metres high.

Workers at Exxon’s Odoptu oil field, eight km off the northeast coast of Sakhalin, had to shovel their way out of their dormitory last winter to clear pipe valves and free oil pipelines of snow. “The blizzards were so bad that at one point we had to evacuate half of the staff,” says Pavel Garkin, head of the field’s operations.

Now Moscow hopes to attract global oil players to another extreme location: its icy Arctic waters. Shared by Canada, Denmark, Iceland, Norway, Russia and the United States, the Arctic may hold around one-fifth of the world’s untapped oil and gas reserves according to a US Geological survey. The past few years have seen a rush of activity in the region, with UK oil explorer Cairn Energy drilling for oil off the west coast of Greenland and Norway’s Statoil, one of the world’s largest offshore oil producers, pushing further and further up the Nordic country’s serpentine coastline, drilling wells inside the Arctic Circle beneath both the Norwegian and Barents Seas.

In September, Russia and Norway put an end to a 40-year dispute over maritime boundaries in the Barents Sea, freeing Russia to push for increased exploration under its portion of the waters just three years after the country spelled out its Arctic claim by planting a rust-proof flag on the sea bed more than four km (14,000 ft) under the North Pole.

The rewards could be huge. Russia, the world’s top oil producer with output of more than 10 million barrels of oil per day (bpd), estimates that its Arctic zone holds around 51 billion tonnes of oil, or enough to fully meet global oil demand for more than four years, as well as 87 trillion cubic meters of natural gas.

But even as Russia opens its northern waters to exploration, there’s reason to pause. In the wake of BP’s catastrophic leak in the Gulf of Mexico this spring, Russian officials and experts warn an oil spill under the ice could turn out far worse than one in warmer deepwater climates. Arctic conditions — remoteness, fragile ecosystems, darkness, sub-zero temperatures, ice, high winds — make dealing with an oil spill a massive task.

At an annual conference for global oil and gas heavyweights held on Sakhalin at the end of September, Russian government officials and offshore industry professionals paid close attention to the dangers of drilling on the Arctic continental shelf. “I have attended 13 of the 14 Sakhalin oil conferences, and this is the first where government regulators were visibly and vocally concerned about offshore oil spill risks,” says Michael Bradshaw, an expert on Russia’s Far East energy industry and professor at the University of Leicester.

It’s not that a spill is more likely in the Arctic than in a warmer, deep-water locale, says Nils Masvie, a director at Norwegian offshore risk-assessment firm Det Norske Veritas. “But you cannot extrapolate and say the risk is the same in a cold climate. No, the risk is higher.”

That’s because it’s so much harder to manage a spill and offshore emergency in the ice and dark. “Sometimes search and rescue operations stop in the evening because it is too dark, resuming again at eight o’clock when the light returns. But if something happens on the Arctic Barents Sea in November it would be, ‘OK, we’ll come back for you in March’,” says Masvie, whose company verifies and certifies equipment used in offshore oil and gas production, such as the Nord Stream gas pipeline being built under the Baltic Sea for Russian gas giant Gazprom.
Lessons from Komi Russia’s track record with oil spills does not inspire confidence.

During the 1970s oil boom, primitive production, drilling and pipeline technology caused pollution levels in rivers, oceans, lakes and groundwater to soar. In 1975, for example, several large west Siberian rivers that run north through Russia’s biggest oil production region and empty into the Arctic Ocean had oil concentrations 21 times the maximum permissible level, according to a government report, ‘Status of Environmental Pollution in the USSR 1975-1976’.

Scientists attributed the large-scale contamination to the widespread use of such unsophisticated oil production practices as intense water flooding, where workers inject water into wells at high pressures to drive out the oil. Most pipes also lacked leak-detection technology.

One of the worst spills occurred in August, 1994, when the aging pipeline network in the northern Komi Republic sprang a leak.

The oil spill was officially put at 79,000 tonnes, or 5,85,000 barrels, though independent estimates put it at up to 2 million barrels. At the high end that would have been half as big as BP’s 4 million barrel Gulf disaster. Two months after the spill started, heavy rains broke a dam that contained the oil, releasing a massive slick into rivers and across forested tundra near the city of Usinsk.

Komi borders the Arctic Circle where the cold makes it hard for oil to evaporate. The oil that didn’t immediately spill into the Arctic Ocean-bound Kolva, Usa and Pechora rivers spread over 186 sq km (72 square miles) of marshland and tundra. There it froze during winter months, according to an environmental case study by the American University in Washington.

The following spring, the oil from the frozen tundra washed back into the streams, seeping into the surrounding vegetation or travelling further down the Pechora to empty into the Barents Sea. A Greenpeace witness reported that April, “as we feared, the spring has brought a deadly tide of oil over the area. There are acres and acres of blackened marshland, and every river and stream has oil in it.”

Water bodies in cold climates are just as vulnerable. “The chemistry of large Arctic lakes is unusual because of the near-absence of annual cycles of nutrients and micro-organisms and the low quantities of dissolved solids,” the guidelines state.

“It’s a very harsh climate,” a LUKOIL press secretary told Reuters. “Most of the year it is freezing, and when there is a lot of snow and everything is covered in ice you don't see the leaks and this makes monitoring difficult. The snow melts in June, and the oil can be seen mostly in streams. This is not a secret.”

Environmental groups agree and say the Komi disaster is further proof of how hard it would be to deal with an oil spill in Arctic seas. “If companies can’t handle 50 meters of frozen mass, how could you expect them to handle a spill on open ocean in Sakhalin or the Arctic?” says Vladimir Chuprov, Greenpeace’s top energy specialist in Russia.

“Cleaning up oil under ocean ice is impossible. You would have to break and remove thousands of tonnes of ice as the oil keeps moving with the currents further out into the ocean.”

Bigger challenges

An added problem, according to a report on Arctic spill response challenges by the World Wildlife Fund, is that sea ice can move or damage oil containment booms. Skimmers can freeze or get clogged by ice chunks, while slush ice can prevent burning fluid from igniting the oil in burn operations.

Following the blowout at BP’s Macondo well, many Arctic oil- producing countries including Russia have revisited their safety and drilling regulations.

The Obama administration decided to put a hold on offshore drilling in Alaska until at least 2011 as it reviews its safety and environmental regulations. In September, White House oil spill commission co-chair Bill Reilly said the BP spill had shown that even in a warm-water climate, advances in spill response and clean-up technology have not kept pace with offshore development.

Before the Gulf spill, Obama had proposed ending the drilling moratorium in territorial waters and opening up the Chukchi and Beaufort Seas in the Arctic Ocean to exploration and development. But the US interior department has now stopped issuing new drilling permits in the Arctic, and adopted a more cautious approach to development in the region because of its unique environmental conditions. A court ruling has also blocked any Chukchi Sea drilling in the near future.

But even if operators aren’t ready for an Arctic oil spill, don’t expect the post-BP pause to last forever. Norway and Russia’s recent detente over maritime boundaries has both countries pushing for more exploration in the region.

Norway plans to auction off 51 new blocks in its part of the Barents Sea for oil and gas exploration, while Russian Prime Minister Vladimir Putin and Russian energy officials hope to see more offshore oil exploration in its part of the Sea. Under current legislation only Gazprom and Rosneft have the right to develop Russia’s continental shelf, but as of January 1, Moscow will open it up to foreign producers.

Rosneft is already talking to western oil and gas majors with experience in offshore drilling, including BP and France’s Total with a view to forming joint ventures in the Arctic.